a rising tide that lifts all yachts.
These findings defy a core precept of conservative economics, the premise that economic growth requires financial investors to be richly rewarded, an idea disparaged by critics as trickle-down economics. The postwar era, by contrast, was an age of trickle-up. Some creditors lost in the short run, but broadly shared prosperity stimulated private business. Eventually, the rising tide lifted all yachts.
— Robert Kuttner on Carmen M. Reinhart and S. Belen Sbrancia’s findings in “The Liquidation of Government Debt,” National Bureau of Economic Research Working Paper 16893, March 2011, mentioned in review of David Graebner’s Debt: The First 5,000 Years, New York Review of Books, 9 May 2013.
Featured image: Saul Steinberg. The Saul Steinberg Foundation/Artists Rights Society, New York.